Question
jerry has a small business selling tea and coffee maker to other businesses. On 31 st December 2019 , the following trial balance. Account Name
jerry has a small business selling tea and coffee maker to other businesses. On 31st December 2019 , the following trial balance.
Account Name | Debit $ | Credit $ |
Sales Revenue |
| 649,800 |
Sales returns | 11,520 |
|
Opening inventory | 42,300 |
|
Purchases | 325,296 |
|
Purchase returns |
| 11,520 |
Freehold property | 151,200 |
|
Equipment at cost | 72,000 |
|
Accumulated depreciation on equipment |
| 10,800 |
Motor vehicle | 77,400 |
|
Accumulated depreciation on motor vehicle |
| 12,960 |
Salaries and Wages | 21,600 |
|
Insurance | 5,760 |
|
Motor expenses | 9,000 |
|
Advertising expenses | 5,400 |
|
Loan interest | 7,200 |
|
Receivables | 73,800 |
|
Allowance for receivables |
| 5,400 |
Payables |
| 54,900 |
Cash at bank | 287,604 |
|
Bank loan |
| 61,200 |
Capital |
| 283,500 |
Total | 1,090,080 | 1,090,080 |
The following information is relevant.
- Closing inventory was valued at $62,400.
- Equipment is depreciated by 25% on reducing balance basis.
- Motor vehicles are depreciated by 20% on reducing balance basis.
- Accrued wages at the end of 2019 amount to $10,800.
- On 1 August 2019 Johns paid $4,800 for insurance which is valid until 31 July 2020.
- Irrecoverable receivables of $4,800 need to be written off.
Required:
- Prepare jerry income statement for the year ending 31st December 2019.
Prepare jerry balance sheet as at December 2019.
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